Document Security Systems, Inc. (DSS) saw its loss narrow to $0.03 million in the quarter ended compared with $0.86 million, a year ago.
Revenue during the quarter grew 12.67 percent to $4.98 million from $4.42 million in the previous year period. Gross margin for the quarter expanded 10 basis points over the previous year period to 42.27 percent. Operating margin for the quarter period stood at positive 0.92 percent as compared to a negative 17.35 percent for the previous year period.
Operating income for the quarter was $0.05 million, compared with an operating loss of $0.77 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $0.40 million compared to negative $0.16 million in the prior year second quarter. At the same time, adjusted EBITDA margin stood at 7.97 percent for the quarter compared to negative 3.67 percent in the last year period.
"We are pleased with the revenue growth and improved expense metrics for the quarter" said Jeff Ronaldi, chief executive officer of DSS, "Additionally, we believe we can continue to improve performance with new product initiatives which we have been working on. These represent strong growth opportunities and we have seen what we believe is very good progress. Furthermore, we are deep into the life cycle of several of our IP monetization programs that have seen reduced activity in the courts recently."
Operating cash flow turns positive
Document Security Systems, Inc. has generated cash of $0.38 million from operating activities during the nine month period as against cash outgo of $1.17 million in the last year period. Cash flow from investing activities was $0.23 million for the nine month period as against cash outgo of $0.07 million in the last year period.
The company has spent $1.23 million cash to carry out financing activities during the nine month period as against cash inflow of $0.14 million in the last year period.
Cash and cash equivalents stood at $0.82 million as on Sep. 30, 2016, down 33.84 percent or $0.42 million from $1.24 million on Sep. 30, 2015.
Working capital turns negative
Working capital of Document Security Systems, Inc. has turned negative to $4.30 million on Sep. 30, 2016 from positive $0.38 million on Sep. 30, 2015. Current ratio was at 0.52 as on Sep. 30, 2016, down from 1.08 on Sep. 30, 2015.
Cash conversion cycle (CCC) has decreased to 6 days for the quarter from 16 days for the last year period. Days sales outstanding went down to 35 days for the quarter compared with 39 days for the same period last year.
Days inventory outstanding has decreased to 19 days for the quarter compared with 42 days for the previous year period. At the same time, days payable outstanding went down to 60 days for the quarter from 66 for the same period last year.
Debt comes down
Document Security Systems, Inc. has recorded a decline in total debt over the last one year. It stood at $6.62 million as on Sep. 30, 2016, down 17.43 percent or $1.40 million from $8.02 million on Sep. 30, 2015. Total debt was 47.79 percent of total assets as on Sep. 30, 2016, compared with 30.42 percent on Sep. 30, 2015. Debt to equity ratio was at 2.38 as on Sep. 30, 2016, up from 0.57 as on Sep. 30, 2015.
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